MONTVALE, N.J., June 9, 2015 /PRNewswire/ -- AEP Industries
Inc. (Nasdaq: AEPI, the "Company" or "AEP") today reported
financial results for its second quarter ended April 30, 2015.
Net sales for the second quarter of fiscal 2015 decreased
$9.2 million, or 3%, to $285.7 million from $294.9
million for the second quarter of fiscal 2014. Net sales for
the six months ended April 30, 2015
decreased $6.3 million, or 1%, to
$561.2 million from $567.5 million in the same period of the prior
fiscal year. The decrease for the second quarter of fiscal 2015 was
the result of a 2% decrease in average selling prices primarily due
to the pass through of lower resin costs compared to the same
period in the prior fiscal year. The decrease for the six months
ended April 30, 2015 was the result
of a 1% decrease in sales volume partially offset by a 0.8%
increase in average selling prices compared to the same period in
the prior fiscal year. Both fiscal 2015 periods were also
negatively impacted by foreign exchange related to our Canadian
operations.
Gross profit for the second quarter of fiscal 2015 was
$49.8 million, an increase of
$19.8 million, or 66%, compared to
the same period in the prior fiscal year. Excluding the
impact of the LIFO reserve change of $11.3
million during the periods and an increase in share-based
compensation expense associated with the Company's performance
units of $0.3 million, gross profit
increased $8.8 million. Gross profit
for the first six months of fiscal 2015 was $82.4 million, an increase of $27.8 million, or 51%, compared to the same
period in the prior fiscal year. Excluding the impact of the
LIFO reserve change of $22.6 million
during the periods, an increase in depreciation expense of
$1.4 million and an increase in
share-based compensation expense associated with the Company's
performance units of $0.6 million,
gross profit increased $7.2
million. The gross profit increase in both fiscal 2015
periods was primarily due to improved material margins. The
increase in the first six months of fiscal 2015 compared to the
same period in the prior year period was partially offset by higher
manufacturing costs, including employee health costs and utility
costs.
Operating expenses for the second quarter of fiscal 2015 were
$29.0 million, an increase of
$0.9 million, or 3%, compared to the
same period in the prior fiscal year and for the first six months
of fiscal 2015 were $56.0 million, an
increase of $1.6 million, or 3%,
compared to the same period in the prior fiscal year. The increases
in both periods are primarily due to an increase in bad debt
expense primarily due to a customer's bankruptcy filing and an
increase in share-based compensation expense associated with the
Company's performance units partially offset by a decrease in
delivery expense primarily due to lower fuel costs.
Brendan Barba, Chairman,
President and Chief Executive Officer of the Company, said,
"Despite ongoing industry and economic challenges impacting sales
volume, we are very pleased with our margin growth and strong
operating performance in the second quarter. The improved
performance was primarily the result of lower resin costs and our
efforts in recent years to improve the efficiency of our operations
during challenging conditions."
Interest expense for the three months and six months ended
April 30, 2015 decreased $0.2 million and $0.1
million, respectively, as compared to the prior year periods
resulting primarily from lower average borrowings under the
Company's credit facility during the comparable periods.
Net income (loss) for the three months ended April 30, 2015 was net income of $11.1 million, or $2.18 per diluted share, as compared to a net
loss of $2.7 million, or $(0.49) per diluted share, for the three months
ended April 30, 2014. Net income
(loss) for the six months ended April 30,
2015 was net income of $11.6
million, or $2.27 per diluted
share, as compared to a net loss of $6.5
million, or $(1.16) per
diluted share, for the six months ended April 30, 2014.
Adjusted EBITDA (defined below) was $23.1
million in the current fiscal quarter as compared to
$14.8 million for the three months
ended April 30, 2014. Adjusted EBITDA
for the six months ended April 30,
2015 was $29.6 million, as
compared to $22.4 million for the six
months ended April 30, 2014.
Reconciliation of Non-GAAP Measures to GAAP
The Company defines Adjusted EBITDA as net income (loss) before
discontinued operations, interest expense, income taxes,
depreciation and amortization, changes in LIFO reserve, other
non-operating income (expense) and share-based compensation expense
(income). The Company believes Adjusted EBITDA is an important
measure of operating performance because it allows management,
investors and others to evaluate and compare its core operating
results, including its return on capital and operating
efficiencies, from period to period by removing the impact of its
capital structure (interest expense from its outstanding debt),
asset base (depreciation and amortization), tax consequences,
changes in LIFO reserve (a non-cash charge/benefit to its
consolidated statements of operations), other non-operating items
and share-based compensation. Furthermore, management uses Adjusted
EBITDA for business planning purposes and to evaluate and price
potential acquisitions. In addition to its use by management, the
Company also believes Adjusted EBITDA is a measure widely used by
securities analysts, investors and others to evaluate the financial
performance of the Company and other companies in the plastic films
industry. Other companies may calculate Adjusted EBITDA
differently, and therefore the Company's Adjusted EBITDA may not be
comparable to similarly titled measures of other companies.
Adjusted EBITDA is not a measure of financial performance under
U.S. generally accepted accounting principles (GAAP), and should
not be considered in isolation or as an alternative to net income
(loss), cash flows from operating activities and other measures
determined in accordance with GAAP. Items excluded from
Adjusted EBITDA are significant and necessary components to the
operations of the Company's business, and, therefore, Adjusted
EBITDA should only be used as a supplemental measure of the
Company's operating performance.
The following is a reconciliation of the Company's net income
(loss), the most directly comparable GAAP financial measure, to
Adjusted EBITDA:
|
Second
Quarter
|
Second
Quarter
|
April YTD
|
April YTD
|
|
Fiscal
2015
|
Fiscal
2014
|
Fiscal
2015
|
Fiscal
2014
|
|
(in
thousands)
|
|
|
|
|
|
Net income
(loss)
|
$
11,128
|
$
(2,724)
|
$ 11,604
|
$
(6,451)
|
Provision (benefit) for taxes
|
5,053
|
(298)
|
5,234
|
(2,935)
|
Interest expense
|
4,719
|
4,933
|
9,635
|
9,716
|
Depreciation and amortization expense
|
7,716
|
8,151
|
16,730
|
15,927
|
(Decrease) increase in LIFO reserve
|
(6,599)
|
4,701
|
(15,961)
|
6,575
|
Other non-operating (income) expense, net
|
(57)
|
16
|
(57)
|
(71)
|
Share-based compensation
|
1,091
|
46
|
2,417
|
(404)
|
Adjusted
EBITDA
|
$
23,051
|
$
14,825
|
$
29,602
|
$
22,357
|
The Company invites all interested parties to listen to its
second quarter conference call live over the Internet at
www.aepinc.com on June 10, 2015, at
10:00 a.m. ET or by dialing
866-610-1072 for domestic participants or 973-935-2840 for
international participants and referencing passcode 52346410.
An archived version of the call will be made available on the
Company's website after the call is concluded and will remain
available for one year.
AEP Industries Inc. manufactures, markets, and distributes an
extensive range of flexible plastic packaging products for the
consumer, industrial and agricultural markets. The Company has
manufacturing operations in the United
States and Canada.
Except for historical information contained herein,
statements in this release are forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties which
may cause the Company's actual results in future periods to differ
materially from forecasted results. Those risks include, but are
not limited to, the timing and completion, in part or full, of the
significant capacity increase announced by North American resin
producers in future years and its impact on future resin pricing;
the ability to pass raw material price increases to customers in
full or in a timely fashion; the ability to implement non-resin
price increases with customers; delayed purchases by certain
customers during periods when resin prices are expected to decrease
in the near term; the availability of raw materials; competition in
existing and future markets; disruptions in the global economic and
financial market environment and limited contractual relationships
with customers. Those and other risks are described in the
Company's annual report on Form 10-K for the year ended
October 31, 2014 and subsequent
reports filed with the Securities and Exchange Commission (SEC),
copies of which are available from the SEC or may be obtained from
the Company. Except as required by law, the Company assumes no
obligation to update the forward-looking statements, which are made
as of the date hereof, even if new information becomes available in
the future.
AEP
INDUSTRIES INC.
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
April 30,
|
|
For the Six
Months Ended
April 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NET SALES
|
$285,722
|
|
$294,942
|
|
$561,161
|
|
$567,459
|
COST OF
SALES
|
235,906
|
|
264,950
|
|
478,781
|
|
512,883
|
Gross
profit
|
49,816
|
|
29,992
|
|
82,380
|
|
54,576
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
Delivery
|
11,974
|
|
12,451
|
|
23,591
|
|
24,469
|
Selling
|
9,150
|
|
9,130
|
|
17,753
|
|
17,788
|
General and
administrative
|
7,849
|
|
6,484
|
|
14,620
|
|
12,060
|
Total operating
expenses
|
28,973
|
|
28,065
|
|
55,964
|
|
54,317
|
Operating
income
|
20,843
|
|
1,927
|
|
26,416
|
|
259
|
OTHER (EXPENSE)
INCOME:
|
|
|
|
|
|
|
|
Interest
expense
|
(4,719)
|
|
(4,933)
|
|
(9,635)
|
|
(9,716)
|
Other, net
|
57
|
|
(16)
|
|
57
|
|
71
|
Income (loss) before
(provision) benefit for income taxes
|
16,181
|
|
(3,022)
|
|
16,838
|
|
(9,386)
|
(PROVISION) BENEFIT
FOR INCOME TAXES
|
(5,053)
|
|
298
|
|
(5,234)
|
|
2,935
|
Net income
(loss)
|
$11,128
|
|
$(2,724)
|
|
$11,604
|
|
$(6,451)
|
BASIC EARNINGS (LOSS)
PER COMMON SHARE:
|
|
|
|
|
|
|
|
Net income (loss) per
common share
|
$2.19
|
|
$(0.49)
|
|
$2.28
|
|
$(1.16)
|
DILUTED EARNINGS
(LOSS) PER COMMON SHARE:
|
|
|
|
|
|
|
|
Net income (loss) per
common share
|
$2.18
|
|
$(0.49)
|
|
$2.27
|
|
$(1.16)
|
Contact: Paul M.
Feeney
Executive Vice President, Finance
and Chief Financial Officer
AEP Industries Inc.
(201) 807-2330
feeneyp@aepinc.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aep-industries-inc-reports-fiscal-2015-second-quarter-and-year-to-date--results-300095911.html
SOURCE AEP Industries Inc.